This week’s column offers readers a simplified and hopefully accurate description of the methods/techniques employed in official studies of inequality and poverty in Guyana.
Measuring inequality
The measure most frequently used officially to indicate levels of inequality/ equality in Guyana is the Gini Coefficient. Readers should not be put off by this term, as the central ideas behind it are quite straightforward. And perhaps more importantly, an understanding of this term is required for an informed appreciation of this topic. The coefficient, devised by an Italian statistician (Gini), has become the most widely used indicator of inequality (or dispersion), within statistical populations. It is expressed on a scale of zero to one (0-1), where 0 represents perfect equality and 1 perfect inequality.
How is the scale established? If cumulative percentages of a given population are plotted against cumulative percentages of their income/consumption and a line is drawn connecting these plots, one arrives at what is termed a Lorenz curve. The resulting curve may be a straight line or literally curved.
More specifically, if let’s say that the first 20 per cent of the population obtains 20 per cent of the income/consumption and the next 20 per cent gets a similar 20 per cent of income/ consumption, then 40 per cent of the population would have gotten 40 per cent of the income/ consumption (that is 20 per cent + 20 per cent equals 40 per cent). If this distribution continues the same for the rest
